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By Vincent Valery

Introduction  

Jan. 13, 2020, © Leeham News: It is no exaggeration to say that 2020 is a pivotal year for Embraer. Whether the tie-up with Boeing materializes will determine its future.

As crunch time approaches for the creation of Boeing Brasil, LNA thought it relevant to study the company’s financial records since 1999. This is another in a series of financial analysis of leading aerospace companies and airlines.

From humble beginnings, the company achieved a dominant position in the regional market with the E-Jet family. After a slump in defense and security business revenues in the early 2000s, the company undertook significant programs. It also entered the business jet market to diversify its revenue streams.

So far, E2 E-Jet sales have been tepid. After years of significant development spending, the Commercial aircraft division is just above red ink, the Defense and Security division isn't profitable and the Business jets are not adding anything to the bottom line.

Regardless of whether the tie-up with Boeing materializes, Embraer will have to take major strategic decisions, especially in the Commercial Aviation division.

Summary

• From government project to world-class OEM;
• Profitability challenges;
• (Not so) diversified revenue sources;
• Plans with Boeing;
• And without it.